Date: 13 February 2007
FY06 results
YNH PROPERTY BERHAD
(YNHPROP)
RM680m
Market Capitalisation:
3158
Board:
Main
Sector:
Properties
BUY
Recommendation:
Key Stock Statistics
Share Price Chart
7.7
Dividend/Share (sen)
5,000,000
NTA/Share (RM)
1.34
4,000,000
Book Value/Share (RM)
1.39
3,000,000
Issued Capital (mil shares)
354.0
2,000,000
RM2.09 (H) - RM1.18 (L)
1,000,000
%
1.5
1.0
0.5
18/01/2007
15/11/2006
12/09/2006
7.59
10/07/2006
EPF
0.0
07/05/2006
18.0
04/03/2006
0
Dato’ Dr.Yu Kuan Chon
13/02/2005
Major Shareholders:
2.0
6,000,000
10.0
52-weeks Share Price Range
2.5
7,000,000
30/12/2005
9.4
8,000,000
27/10/2005
P/E (est.)
2007(F)
25.0
24/08/2005
2006
20.4
21/06/2005
EPS (est.)
18/04/2005
Stock Code:
RM1.92
Price:
Per Share Data
Y/E Dec
Book Value (RM)
2004
1.16
2005
1.25
2006
1.39
2007F
1.56
Cash Flow (sen)
15.2
16.5
20.6
25.2
Earnings (sen)
14.9
16.3
20.4
25.0
Dividend (sen)
10.5
11.0
10.0
11.0
Payout Ratio
51.5
51.8
35.5
31.7
PER (x)
12.9
11.8
9.4
7.7
P/Cash Flow (x)
12.6
11.7
9.3
7.6
P/Book Value (x)
1.9
1.8
1.6
1.4
EPS (sen)
Dividend Yield (%)
5.5
5.7
5.2
5.7
ROE (%)
12.6
12.2
14.6
16.0
Net Gearing (%)
20.3
18.9
16.6
21.4
P&L Analysis (RM m)
Year-end: Dec
Revenue
2004
122.0
2005
168.7
2006
265.3
2007F
310.3
Operating Profit
53.4
77.4
102.7
125.1
Depreciation
(0.7)
(0.7)
(0.8)
(1.0)
Interest Expenses
(3.2)
(2.5)
(4.1)
(4.5)
Pre-tax Profit
51.0
75.0
98.7
121.0
Effective Tax Rate
24.9
28.6
27.2
27.0
Net Profit
38.3
53.6
71.8
88.3
Operating Margin (% )
43.8
45.9
38.7
40.3
Pre-tax Margin (% )
41.8
44.5
37.2
39.0
Net-Margin (% )
31.4
31.8
27.1
28.5
PP 12242/4/2005
FY06 Highlights:
(RMm)
Q406
Q306
%
chg
FY06
FY05
168.7
%
chg
57
Revenue
80.5
89.0
(10)
265.3
Op Profit
28.0
26.2
7
102.8
77.5
33
Int expense
(1.3)
(0.9)
47
(4.1)
(2.5)
61
Pretax profit
26.7
25.3
6
98.7
75.0
32
Net profit
18.9
18.3
4
71.8
53.6
34
5.4
5.2
3
20.4
16.3
26
Op margin %
34.8
29.4
38.8
46.0
Pretax margin%
33.2
28.4
37.2
44.5
Net margin %
23.5
20.6
27.1
31.8
FY06 results were within expectations. Despite the
lacklustre property market, YNH Property Berhad (YNH)
posted a 57% Y/Y rise in revenue in FY06, underpinned
by stronger contributions from its property development
projects in Perak and Klang Valley. Pretax profit rose by
a smaller 32% due to lower margins while FY06 EPS
grew by 26% Y/Y to 20.4 sen on a 7% rise in weighted
share capital to 351.9m shares. YNH proposed a final
gross dividend of 5 sen, bringing the total gross dividend
in FY06 to 10.0 sen. This is slightly below our projection
of 11 sen per share.
Strong momentum should continue into 2007. YNH is
confident of better results in FY07, underpinned by higher
contributions from its projects in Kuala Lumpur. It is
currently developing several projects with gross
development value (GDV) of over RM4b. Looking ahead,
property development projects in Klang Valley are
expected to generate 80% of group profit, with the 20%
balance from its Perak projects.
www.kimengresearch.com.sg
YNH Property Berhad
13 February 2007
of GDV – are expected to have a combined GDV of
RM1b and will start to contribute in 2009.
Table 1: YNH’s property projects
GDV
(RMm)
Area
(acre)
Projects in Kuala Lumpur
2440
Lot 163 Suites, Jalan Perak
280
1.0
Ceriaan Kiara, Mont’ Kiara
160
3.1
Wisma YNH, besides Shangri-La
Kuala Lumpur
1000
3.0
Land behind Renaissance KL along
Jalan Sultan Ismail
200
2.0
Projects 1-5 Duta (near Duta
Nusantara & Duta Solaris)
800
18.0
Projects in Perak
2300
Manjung Point
2300
•
•
•
•
YNH will continue to scout for prime land in the Klang
Valley. This includes a 6-acre land near Plaza Mont
Kiara, which could be developed jointly with several
foreign parties into an integrated commercial
development with a GDV of at least RM0.5b.
Finance & dividends
Balance sheet is healthy, with net gearing of about 17%
as of Dec 2006. Dividends-wise, YNH’s policy is to
allocate at least 30% of its net profit as dividends. With
better profits, we expect YNH to raise its gross dividend
to 11 sen per share in FY07, translating to a net payout
of 32%.
782
Balance Sheet
Lot 163 Suites – The project is located in Jalan
Perak (next to Wisma Hong Leong), and comprises
service apartments, a retail arcade and an office
tower. Its GDV has risen to RM280m from RM218m,
due to an increase in lettable office space to around
100,000 sq ft. Take-up rate for the service
apartments is around 90%, while the office block is
up for en-bloc sale.
Y/E 31 Dec (RMm)
Ceriaan Mont Kiara – The project, which is
expected to be launched soon, is in the affluent Mont
Kiara area and will have 238 units of high-end
condominiums. The GDV is now higher at RM160m
from RM140m previously, thanks to an increase of
its selling price to RM360 psf.
2004
2005
2006
2007F
Total Assets
461.1
623.1
668.8
771.0
Fixed Assets
114.5
166.1
147.8
151.8
Current Assets
166.9
330.7
369.9
418.2
L T Assets
179.7
126.3
151.0
201.0
Current Liabilities
121.7
111.4
125.8
129.7
L T Liabilities
46.1
57.8
46.1
96.1
Share Capital
261.3
350.6
354.0
354.0
Shareholders Funds
303.6
439.4
493.0
553.3
Major shareholders
The Yu family now controls about 20% of YNH while the
Employees Provident Fund holds another 7.6%. The Yu
family also owns 20.7% of Rapid Synergy Berhad (RSB),
a company listed on the Second Board of Bursa
Malaysia. RSB is involved in property development,
property investments and the precision tools business.
We have been assured that YNH will remain the property
development arm of the Yu family; and the family’s longterm plan is to make RSB its property investment arm.
Wisma YNH – The flagship project is located next to
Shangri-La Hotel Kuala Lumpur, and will be
developed in a joint venture (60:40) with Singapore’s
CapitaLand Limited. The iconic project, with 1.2m sq
ft of Grade A office and retail space, has an
estimated GDV of RM1b. Construction is expected to
start in mid-2007, with completion slated for 2011.
The MOU was signed on 20 Dec 2006; a definitive
agreement will be signed once the relevant
approvals have been obtained.
Attractive valuations; BUY retained
YNH remains attractively valued, at 7.7x FY07 PER and
a projected dividend yield of more than 5%. A re-rating to
a PER of 9x will translate to a target price of RM2.25.
Manjung Point – Manjung Point, YNH’s flagship
project in Perak with a GDV of RM2.3b, will be
developed over 20 years. More than 60% of buyers
are civil servants – mainly navy personnel at the
nearby Lumut Naval Base. This project clearly
benefits from having a near-by captive market. YNH
is the largest property developer in the Manjung
district, with an estimated market share of 65-70%.
Annual output is about 500 residential and
commercial units, with respective average selling
prices of RM100,000 and RM350,000 per unit.
YNH also secured several parcels of prime land in Kuala
Lumpur (behind Renaissance Kuala Lumpur) and Mont
Kiara (Project 1-5 Duta/Solaris), measuring 20 acres.
These land parcels – which were acquired in joint
ventures with landowners, who will receive a percentage
2
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YNH Property Berhad
13 February 2007
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